Digital challenger, B, has launched its first credit card offering free overseas spending, a low interest rate of 9.9 per cent and no transfer fees.
The off-shoot of Clydesdale and Yorkshire Banks launched in May last year with both a current account and savings deal, available only through its smartphone app.
The bank’s app already offers real-time insights on your spending, plus it lets you tag transactions and set up budgets in much the same way as popular start-up banks Monzo and Starling. But is it’s new card actually any good? We have take a look.
B: Credit card customers can tag transactions and view real-time balances via the app
Monzo currently only offers a prepaid card (although a current account is in the wings) while Starling offers a current account.
B already offers an Instant Savings Account paying 0.5 per cent and a current account which waives overdraft fees for two days each month and pays 0.25 per cent interest. You can read our review of the account here.
B will be the first to offer a credit card. Account holders will also be able to use the app to manage a Clydesdale or Yorkshire Bank loan.
The app comes with some handy features, including tagging spending, setting budgets and receiving personalised insights into your spending habits.
The new platform is backed by Clydesdale and Yorkshire Banks and is therefore fully regulated by the Financial Conduct Authority.
The association also means you have access to Clydesdale and Yorkshire’s telephone banking and their network of branches should you need to bank face-to-face or over the phone.
How good is the B credit card?
Credit cards with 0 per cent interest deals on sign-up come with potentially expensive traps if you don’t use them correctly, meaning many prefer to steer clear of them altogether.
B’s new card will appeal as, instead, it offers a no-frills approach, opting for a consistently low interest rate rather than a disappearing promotional deal.
Low rate credit cards come with interest typically 10 per cent lower than the average APR, with the cheapest deal available charging below 5 per cent compared to standard rates of 18 or 19 per cent.
The card comes with no foreign transaction fee, meaning spending abroad is free. It is the only low-rate credit card to combine the two offers.
However unlike some specialist cards (see below) it will apply a charge for using an ATM to withdraw cash while on holiday.
This will cost you 3 per cent of the amount you withdraw, with a minimum of £3.
Remember when you do this, interest is applied instantly, so you will want to make sure to clear your balance as soon as possible.
Beefed up budgeting features: B’s dashboard offers insights on your spending
Where can you find a better alternative?
While B is offering the only card to combine a low rate and no overseas charges, those wanting just one of these features can find better deals separately.
There are several deals on the market that will charge lower interest than B.
MBNA for example offers a temporary interest rate of 4.9 per cent on any balance transfers and purchases made within the first 60 days – for five years.
The AA has the lowest long-term rate charging 5.85 per cent interest on both balance transfers and purchases for life, with the benefit of no extra fees for shifting debt from an existing credit card.
The AA won’t charge you to transfer a balance from an existing credit card, but MBNA applies a 0.5 per cent fee.
You won’t want to use either card for overseas spending however. Both charge a 2.99 per cent foreign transaction fee.
When it comes to overseas fees Creation’s Everyday Credit Card may be a better alternative for anyone planning to withdraw cash while on holiday.
It charges no fees for withdrawing money or spending overseas but it is a relative newcomer to the market. The provider charges a slightly higher APR at 12.9 per cent.
Another popular overseas card is the Halifax Clarity Credit Card. Again it charges nothing extra for using an ATM or spending while abroad but it comes with interest of 18.9 per cent APR.
Santander’s new Zero Credit Card offers the same deal, but watch out as it comes with a higher interest rate of 29.9 per cent on cash withdrawals.
- Read more about the best credit and debt cards to use abroad here.
WHAT ABOUT A PREPAID CURRENCY CARD?
If you would rather not change banks, currency cards offer holidaymakers the chance to load up a card with money to spend while they are away and potentially benefit from lower rates.
Travellers should make sure these rates are better than their bank and check all the small print but typically these cards offer highly competitive exchange rates plus zero exchange rate fees.
One thing to watch out for when choosing your card, some come with sneaky ‘dormancy’ fees or charge hefty amounts to use in the UK so make sure you check the small print.
You can read more about our favourite options here.
FairFX has one of the best and offers This is Money and MailOnline readers a free MasterCard prepaid card, which usually costs £9.95.
THIS IS MONEY’S FIVE OF THE BEST CREDIT CARDS